WPP and Publicis Groupe are the big winners in food conglomerate Nestlé’s review of creative agency work on assorted brands in its Nestlé USA portfolio. IPG also reportedly expanded its relationship with the company.
Multiple parties with direct knowledge of the matter told Adweek that Grey, J. Walter Thompson, Casanova//McCann and Publicis each scored new business in the recently-concluded review, which launched in April.
At least one agency, Doner, has been cut from the Nestlé roster. The MDC Partners shop previously worked on DiGiorno pizza in addition to beverage brands Nescafé, Clásico and Taster’s Choice. 360i, which had handled digital work on several brands including Skinny Cow and Lean Cuisine, also reportedly lost those responsibilities while retaining portions of the business that fall outside the Nestlé USA portfolio.
“We’re always looking at ways to better work with and leverage our agencies,” said a company spokesperson. “With that, periodic changes do occur, but as a matter of policy, we don’t comment on them.”
Representatives for Grey, JWT, McCann, Doner, 360i and Publicis declined to comment for this story.
The review primarily concerned frozen meals, prepared foods, coffee and ice cream, with multiple brands up for review.
According to several individuals close to the business, Grey won agency of record duties on the Fit Kitchen, Outshine, Lean Cuisine and Haagen Dazs lines, adding above-the-line and digital work to its existing responsibilities. (The agency successfully defended its AOR status on the last two brands.)
JWT kept the Stouffer’s business and won creative AOR work for Buitoni pasta moving forward, sources said.
Publicis also joined the Nestlé U.S. roster as the company consolidated its frozen pizza brands (DiGiorno’s, Tombstone, Jack’s and California Pizza Kitchen) and assigned lead duties on Coffee-Mate to the group, according to multiple parties. It is unclear at this time which Publicis agency will handle that work.
Finally, McCann’s Hispanic network Casanova//McCann reportedly expanded its responsibilities on Nescafé, Nesquik and other unspecified product lines.
The review did not affect Nestlé’s relationships with other agencies including Leo Burnett and Deep Focus, which will continue to work on the Purina brand. Earlier this month, The Wall Street Journal reported that the company is in talks to acquire Canada’s Champion Petfoods for more than $2 billion, in large part due to pressure from activist investors pushing the higher-margin pet food business. This move follows Nestlé’s January decision to sell off most of its confectionary brands, like Butterfinger and Baby Ruth, to Italy’s Ferrero Group.
Several parties familiar with the client’s plans claim the primary goal of the review was to cut costs. One source said Nestlé executives described it as “a consolidation process” while another told Adweek the client explicitly stated a desire to reduce its agency roster by up to 50 percent.
The second party speculated that these cuts may ultimately impact both Nestlé’s spending totals with the three holding companies and its relationships with a variety of smaller, digitally-oriented agencies. The last such round of downsizing took place in 2014.
Initial reports implied that the review was entirely procurement-driven, but several sources said their agencies made presentations to the client.
“The overall selection process is a collaboration between marketing, procurement, the communications and digital centers of excellence,” read a memo sent to executives by the Nestlé procurement team in April. “We aggregated agency assessment data across brands to have a full picture of agencies with multiple brand assignments. We summarized the discussions, scoreboards and findings and shared with brand teams for any further revisions. Ultimately, marketing’s overall assessment of capabilities and performance drove decisions.”
Nestlé spent approximately $619 million on paid media across its brand portfolio in 2017, according to the latest estimates from Kantar Media. During the first quarter of 2018, its total budget was $140 million, a $15 million drop from the previous year.